Sylvan Beach village board responds to state audit

Sylvan Beach >> A corrective action plan has been submitted in response to a recent audit conducted in the Village of Sylvan Beach by the Office of the State Comptroller, according to Mayor Greg Horan, addressing policies and procedures relating the financial responsibilities of the clerk-treasurer.

The audit, which examined board oversight procedures relating to auditing claims and its annual audit for the period June 1, 2011 to July 31, 2012, was released in May and required the board to submit a plan for corrective action within 90 days.

The objective of the audit was to determine if the board had fulfilled oversight responsibilities by conducting an effective audit of non-payroll claims and performing an annual audit of the clerk-treasurer's records. Eighty-nine check payments totaling $338,056 were reviewed to determine whether the related 148 claims were for appropriate village purposes, properly supported, authorized, and paid as authorized.

Included in the findings were 27 claims totaling more than $18,000 listed in the paid voucher detail reports that were not allowed to be paid prior to audit. Although village law does allow payments prior to audit for certain expenses such as utilities and postage, several payments including those for band concert performances, employee reimbursements, advertising, supplies, employee training, payments to an election custodian and building cleaner were paid prior to audit.

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Compliance with the village's procurement policy was questioned, with services for advertising, legal, and engineering acquired without competition. Payments for Dumpster services and holiday lights also did not comply with the village's procurement policy, which requires written quotes from three vendors for purchases between $3,000 and $10,000. According to the mayor, the purchase of the holiday lights was unplanned but had been informally pre-approved by the board.

A $5,000 payment to the Resort Association, the village's contribution for annual advertising, was cited because no contract existed to specify what services would be provided.

"The board did not effectively audit all claims because it only reviewed abstracts and paid voucher detail reports to authorize claim payments," the audit stated. "The board did not audit each related claim listed on the abstract and/or detail report. In addition, the mayor did not sign the abstracts to certify to the clerk-treasurer that the claims had been audited and approved for payment by the board."

In light of assertions that prior audits resulting in similar findings were not followed up with corrective actions, Horan said he cannot speak for previous administrations but commended the current Board of Trustees for their diligence.

"We are taking this seriously and have met on several occasions to discuss moving forward," he remarked, "I do know our current board is spending considerable time and effort reviewing the bills and gaining a deeper understanding of the way things operate."

Despite the concerns brought forth, the audit indicated no inappropriate transactions were discovered, but the noted the routine payment of claims prior to board audit increases the risk of misuse or diversion of funds.

"It's important to note that there is no big smoking gun here, there is no money unaccounted for," Horan said. "We had some areas of concern to work on and those are being addressed."

Six recommendations were provided, including that the board should conduct a thorough audit of claims before authorizing payment to determine that they are appropriate and in compliance with all village policies as well as conduct an annual audit of the clerk-treasurer's financial records, which the mayor said has and will continue to be conducted.

It was also recommended that written quotes be obtained in accordance with existing policy, and amendment of the procurement policy to require solicitation of professional services. Horan said the board is still considering options relating to acquisition of professional services such as attorneys and engineering.

"We have had a long-standing relationship with our attorney; he's right here in the Beach, and he gives us a very competitive rate for the work he does," Horan said. "It's something we need to take a close look at and discuss more thoroughly."

The Corrective Action Plan was submitted and published in accordance with regulations on July 19, Horan said. The village board in Sylvan Beach meets the first Monday of each month at 4 p.m. and the third Monday of each month at 7:30 p.m.